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HomeMy WebLinkAbout1998-12-16 99-38 ORDERCOUNCIL ACTION Item No. 99-38 Date December 16, 1998 Item/Subject: Authorizing Execution of Three Party Agreement with Realty Resources Chartered and Citizens Bank of New Hampshire Relating to Freese's Building Redevelopment Project Responsible Department: Legal Citizens Hank of New Hampshire is the construction lender to Realty Resources Chartered, for redevelopment of the lower three floors of the front portion of the former Freese's building. Citizens Bank will be lending up to $1.95 million in construction financing, to be replaced in December 1999 by $1.934 million in permanent financing previously approved by the City of Bangor. As part of the documentation for its construction loan, Citizens Bank has (cont'd on next page) Associated Information: Order, Three Party Agreement Finance CityMA Y(/ For Passage First Reading Referral Page 1 of 1_ Departsent Head Manager's Comments: `1 A Associated Information: Order, Three Party Agreement Finance CityMA Y(/ For Passage First Reading Referral Page 1 of 1_ asked Realty Resources and the City to sign a "Three Party Agreement." Under the agreement, the City (1) confirms that it has approved $1.934 million permanent financing for this portion of the project, and that the City will disburse its loan funds no later than December 31, 1999, subject to the conditions of our loan commitment letter and loan documents; and (2) agrees to provide notice to Citizens Bank of any default by Realty Resources. The agreement does not materially alter any terms or conditions of the City's loan commitment or Obligations to Realty Resources. The attached Order would authorize execution of the Three Party Agreement. I have reviewed the agreement, and recommend Council approval. AB AIQ n Aeeigaed to Councilor Crowley December 16, 1998 CITY OF BANGOR QITLE) (Order Authorizing Execution of 'Three PartyAgreement with net Yartmers. LLC and Citizens Bank of New Hampshire Relating to Freese's Building Redevelopment Project By iA City Coutwil of tie City of Deaver: ORDERED, THAT the City Manager is hereby authorized, on behalf of the City of Bangor, to execute a "Three Party Agreement" with ] Partnere. LLC and Citizens Bank of New Hampshire, substantially in the form attached, to provide assurances in connection with the financing of a portion of the Freese's Building redevelopment project. IN CITY COUNCIL December 16, 1998 Passed A True Copy, Attest: CITY CLERK AAisaed to Coaoeiloe Crowley December 16, 1998 CITY OF BANGOR QnW (orb 1p Authorizing Execution of Three Party Agreement with Realty Resources Chartered and Citizens Bank Of New Hampshire Relating to Freese's Building Redevelopment Project BY tM City Cor wH of W City ofApsMr. ORDERED, THAT the City Manager is hereby authorized, on behalf of the City of Bangor, to execute a "Three Party Agreement" with Realty Resources Chartered and Citizens Bank of New Hampshire, substantially in the form attached, to provide assurances in connection with the financing of a portion of the Freese's Building redevelopment project. IN CITY COUNCIL December 16, 1998 Notion to Amend by Substitutiong the words "MC Partners, INC whatever the words Realty Resources Chartered" appears Nation Seconded Passed as Amended f CI a 99-38 ORDER Title,Authorizing Execution of Thies Party Agreement with Realty Resources Chartered end Citizens sank of New Redevelopment ...... lopnen[ Project ...................................... a. AmAgned to ..................... ..... . THREE PARTY AGREEAENT RePermanent Loen THIS AGREEMENT is made and entered into by and among CITIZENS BANK NEW HAMPSHIRE, aNew Hampshire Bank with a principal place of business at 100 Middle Street, Pardee, Maine 04101(the "Seeds"), the C1TY OF BANGOR MAINE, a Maine municipal corporation (the Temsman Lenten"), and REALTY RESOURCES CHARTERED, a Maine corpomtiom (the'Borrower") having its principal place of business and mailing address at 247 Commercial Strew, Rockport' Maine 04856 (the "Borrower"). RECITALS: A. The Borrower is the owner of Unit #1 in the Freese Building C;rmominirm presently consisting ofthe lower three Boors in the former Freese Building Maine Street, located in the City of Bangor, Maine, and more particularly described in Exhibit A attached hereto and made a part ofthis Agreement (the "Land"). The Borrower intends to renovate Udt #1 into 45,000 N, ft. of commercial shell space (the "Improvem nW). The Land and the Improvements are hereinafter collectively referred W as the "Project". B. The Improvements are to be renovan d and completed substantially in accordance with the plans and specifications prepared by Curtis, Walter, Stewart Architects identified in Exhibit B (the "Plans and Specifications"), the budget and and estimates attached herm as Exhibit B-1 and the terms of the Construction Loan Agreement, dated December 1998 between the Bank and the Borrower (the "Communion loan Agreement"). C. The Bank has agreedto make a loan to the Borrower in the principal mount of an to ONEMR,WONNNEHUNDREDFHiTYTHOUSAND arrimVINDOLLARS ($1,950,00000)(the "ConsmmctionloW)for the construction ofthe Improvements and the payment of certain related costs and expenses. The Construction Loan will be advanced to the Borrower under the terms of the Construction Loan Agreement, and will be evidenced by a note that will be seared by, among other things, a cannon Mortgage, Security Agreement and Financing Statements, a Collateral Assignment of Leases and Rents with a Collateral Assignmat of Project Documana (the "Security Deed") encumbering the Project and certain related personal property' of the Borrower. D. The Borrower has obtained a commitment from Penmacnt Leader for permanent mortgage toms on the Project in the collative total amount of $1,934,300 00 consisting of a $1,534,300 bear and a$400,000 loan(collectively the "Permanent Loan"). The Conmdtncnt is evidenced by a Inter from Permanent Leader to the Borrower, dated on or about September 29, 1998 (the "Commitment"), a copy of which is attached hereto as Exhibit C. E. The making ofthe Conservation Loan by the Bulk is contingent upon the agreement of Paramount Lender to provide permanent financing for the Project by making Permanent Low to the Borrower upon completion of construction of the Improvements in accordance whh the terms of the Construction Loan Agreement and in wmphanse with the terms of the Commitment and this Agreement. F. This Agreement is bang executed to coordinate the aforesaid financing arrangements. M ORDER TO Pvfl) ENT the above facts and understaMings, and for good and valuable consideration, the receipt and sutficieucy of which are hereby acknowledged, the parties hereto agree as follows: 1. Fundhne of Permanent Loan. When the terms of the Commitment have been complied with (or waived by Permusent Lender), Permanent Loan will be closed by the exeumon aad delivery by the Bonower directly to Permanent Lender of new Icer documents The $1,934,300 proceeds ofPermamera Loan will be advanced directly by Permanent Leader to the Bank to the extent required to pay and satisfy the Construction Loan. 2. The Cbsine Date (a) The funding ofPermenem Loan will be consummated on or before the date specified in the Commitment for its expiration, namely December 31, 1999 (the "Closing Date-). (b) The Closing Date may be extendd by onmen agreement between the Bank and Procurator Lender, and any such agreement will bind the Borrower as if it were a party to that agreement, provided that Borrower may enforce the Commitment if au conditions have been satisfied. (c) Nothing in this Agreemeat or in the Commitment will be construed to prevent the Closing Date from occurring eazGer than the expiration date specified in the Commitment. 3. Laaa Documents. Thefomaofthe Perrnanent Loandommentsidentlfiedin Exhibit D have been agreed to by the Borrower and Permanent Lender. The forms of any additional loan documents that we required by the Commitment must be idemiLed in Exhibit C and agreed upon by the parties prior to the fust advance of any proceeds of the Construction Loan by the Bank unless the Bahr waives that requirement. The approved forms of Permanent loan documents required by Permanent Commitment may rent be amended without die prior written consent of the Bank and Pennmwm Lender, E. The making ofthe Conservation Loan by the Bulk is contingent upon the agreement of Paramount Lender to provide permanent financing for the Project by making Permanent Low to the Borrower upon completion of construction of the Improvements in accordance whh the terms of the Construction Loan Agreement and in wmphanse with the terms of the Commitment and this Agreement. F. This Agreement is bang executed to coordinate the aforesaid financing arrangements. M ORDER TO Pvfl) ENT the above facts and understaMings, and for good and valuable consideration, the receipt and sutficieucy of which are hereby acknowledged, the parties hereto agree as follows: 1. Fundhne of Permanent Loan. When the terms of the Commitment have been complied with (or waived by Permusent Lender), Permanent Loan will be closed by the exeumon aad delivery by the Bonower directly to Permanent Lender of new Icer documents The $1,934,300 proceeds ofPermamera Loan will be advanced directly by Permanent Leader to the Bank to the extent required to pay and satisfy the Construction Loan. 2. The Cbsine Date (a) The funding ofPermenem Loan will be consummated on or before the date specified in the Commitment for its expiration, namely December 31, 1999 (the "Closing Date-). (b) The Closing Date may be extendd by onmen agreement between the Bank and Procurator Lender, and any such agreement will bind the Borrower as if it were a party to that agreement, provided that Borrower may enforce the Commitment if au conditions have been satisfied. (c) Nothing in this Agreemeat or in the Commitment will be construed to prevent the Closing Date from occurring eazGer than the expiration date specified in the Commitment. 3. Laaa Documents. Thefomaofthe Perrnanent Loandommentsidentlfiedin Exhibit D have been agreed to by the Borrower and Permanent Lender. The forms of any additional loan documents that we required by the Commitment must be idemiLed in Exhibit C and agreed upon by the parties prior to the fust advance of any proceeds of the Construction Loan by the Bank unless the Bahr waives that requirement. The approved forms of Permanent loan documents required by Permanent Commitment may rent be amended without die prior written consent of the Bank and Pennmwm Lender, 4. Completion a Construction. Upon completion ofwrawmion of the Improvements in accordance with the Plans and Specifications and the Construction Loan Agreement, the Benk and the Borrower agree to deliver w Permarimt Lender written notice of such completion and of proposed time for the closing ofPennatmnt Loan, which must beat least 15 days following the date of that nonce and most not be later than the Closing Date. Such comes may be given at any time prior to the Closing Date. On the date specified in the notice, or on any earlier or later date agreed to by the parties, the Permanent Loan will be funded n contemplated by this Agreement so long as all conditions of such funding sen forth in the Commitment and this Agreement have been fulfilled. S. Defaults of Borrower. (a) Permanent Lender agrcea w give the Bank ad the Borrower prompt writtm notice of my default athe Botrower in complying with the terms and conditions of this Agreement, or the Permanent Commitment. The Bank and the Borrower will have 30 days after receipt of any such tmfice of default to are all defaults, except that an web period for core will Word the Closing Date without the prior written consent of Permanent Lender. (b) Usury Event of Default arises under the Construction Loan Agreement and related documents cams, the Bahr agrees to give prompt whom notice of the erdstence and nature of such Evem ofDefaot to Permanent Lender. The Bank agrees to accept performance from Pemanent Lender on behalf of the Borrower with the applicable grace period if any under the Construction Loan Agreement. G Covenants of Borrower. The Borrower will proceed diligently With the conmussion of the Improvements in accordance with the Plans and Specifications and the Construction Loan Agrement, and will not seek to do anything that will hinder or fruatmte the making ofPermmerd Loan by Permvrent Leder. The Borrower will cooperate m all times to wrisummate the dosing of Permanent Lom, and will provide all information and materials and execme ad deliver all documents that are necessary to consummate Permanent Loan under the terms of the Commitment and this Agrmaoem. 9. Representations of Permanent Lender. By the execution of this Agreement, Permanent Lender represents that: (a) the Commitment is in full force and effect, and permanent Lender bar received the payment in full of all other fees due Permanent Linder under the Commitment, excluding reimbursement of expenses incurred after the date of this Agreement (b) it has reviewed and approved the Plans and Specifications for the Project; (c) it has reviewed and approved the cost estimates and budget for the Project; 4. Completion a Construction. Upon completion ofwrawmion of the Improvements in accordance with the Plans and Specifications and the Construction Loan Agreement, the Benk and the Borrower agree to deliver w Permarimt Lender written notice of such completion and of proposed time for the closing ofPennatmnt Loan, which must beat least 15 days following the date of that nonce and most not be later than the Closing Date. Such comes may be given at any time prior to the Closing Date. On the date specified in the notice, or on any earlier or later date agreed to by the parties, the Permanent Loan will be funded n contemplated by this Agreement so long as all conditions of such funding sen forth in the Commitment and this Agreement have been fulfilled. S. Defaults of Borrower. (a) Permanent Lender agrcea w give the Bank ad the Borrower prompt writtm notice of my default athe Botrower in complying with the terms and conditions of this Agreement, or the Permanent Commitment. The Bank and the Borrower will have 30 days after receipt of any such tmfice of default to are all defaults, except that an web period for core will Word the Closing Date without the prior written consent of Permanent Lender. (b) Usury Event of Default arises under the Construction Loan Agreement and related documents cams, the Bahr agrees to give prompt whom notice of the erdstence and nature of such Evem ofDefaot to Permanent Lender. The Bank agrees to accept performance from Pemanent Lender on behalf of the Borrower with the applicable grace period if any under the Construction Loan Agreement. G Covenants of Borrower. The Borrower will proceed diligently With the conmussion of the Improvements in accordance with the Plans and Specifications and the Construction Loan Agrement, and will not seek to do anything that will hinder or fruatmte the making ofPermmerd Loan by Permvrent Leder. The Borrower will cooperate m all times to wrisummate the dosing of Permanent Lom, and will provide all information and materials and execme ad deliver all documents that are necessary to consummate Permanent Loan under the terms of the Commitment and this Agrmaoem. 9. Representations of Permanent Lender. By the execution of this Agreement, Permanent Lender represents that: (a) the Commitment is in full force and effect, and permanent Lender bar received the payment in full of all other fees due Permanent Linder under the Commitment, excluding reimbursement of expenses incurred after the date of this Agreement (b) it has reviewed and approved the Plans and Specifications for the Project; (c) it has reviewed and approved the cost estimates and budget for the Project; 99-38 (d) Borrower has received ell necessary approvals acrd permits Gom the City of Bangor and the Maine Historic Preservation Commission; (e) it has reviewed and approved the tames of Construction Contract between Pen Bay Builders, Inc. and Borrower dazed 1998; (f) it bas reviewed end approved title ins irewe commitment dated as of August ) 1998 issued by Corrmomvealth Title Insurance Comparry and agrees to accept in satisfaction of the title insurance requirements of the Commitment an ALTA mortgagee form of fide insurance policy issued by Commonwealth Title Insurance Company in the amount ofPermment Loan, showing fee title in the Project vested in the Borrower and insuring Permanent Landers Mortgage and Security Agreement as a first ban on the Project, subject orgy to bcd property tuxes and assessments that are a lien but are not yet delinquent, matters shown on the survey described in clause (d) below, and the exceptions shown on Schedule B which are to be discharged or satisfied at closing; (g) it has reviewed and approved the survey of the project Land entitled 'Land Title Survey/Condomitdum Plat "dated prepared by inc. and agrees to accept the survey and lever reports in satisfaction of the requirements ofthe Commitment; (h) it has reviewed and sprayed the Plans and Specificmione (i) it has reviewed and approved the Phase I Unviromnenm] Site Assessment report dated 1998, prepared by and agrees that such report satisfies the requirements of the Commihnenr and Q) it has reviewed and approved the opinion letter, dated 1998 from Drummond Woodsum & MacMahon to the Banic and Permanent Lender, and the accompanying evidence of Borrower's existence and authority to enter into the Permanent Wan. The following conditions precedent remain to the funding of the Permanent Loan: (a) Completion of the Improvements in accordance with the Plans and Specifications and applicable federal, state, saM city laws, ordinances and building codes; (b) Inspection by the City of the Improvements and related books, records, warrants, materials, equipment, payrolls and conditions ofemploymerd; (c) Use of the Construction Loan proceeds in accordance with the approved budget and cost estimates, and the payment by Borrower of my cog overruns. (d) Receipt of hazard and liabilityinsurance satisfactory to Permanent Lender in the mount of which may be insurance carried by the Freese Building Cmldominlmn Association; 10. Amendments. No amendment or modification of the Commitment after the date of this Agreement will affect any obligations of the parties under this Agreement unless that amendment or modification is approved in writing by all parties to this Agreement. This Agreement may be amended only by a written instrument signed by all of the parties. 11. Notices. All rmtices under this Agreement must be givem in writing and will be considered to have been duly and properly served upon personal delivery to the party or an officer of the party being served, or if mailed, upon the that to occur of actual receipt or the expiration of forty-eight (48) hours after deposit in United Stares reginered or cmdfied mail, postage prepaid, addressed to the parties as follows: Borrower: Realty Resources Chartered Ann William Shanehma 247 Commercial Street Rockport, Mane W856 permanent Lender: Erik M. Stumpfel, City Solicitor CITY OF BANGOR 73 flarlow Street Bangor, Maine 04401 Bank Thomas N. Les, Vice President CITIZENS BANIC NFI 100 Middle Street Penland, ME 04tol Such addresses may be changed by notice to the other parties given in the same cancer as provided above, such changes in address to be effective only upon receipt. 12. Termination. This Agreement will terminate upon the Funding of Permanent Loan by Permmient Lender. 13. Counterparts, This Agreement maybe Merited in my mamba ofwunteryms by the parades. Each of the counterparts will be considered an oral, and all counterparts wdt cormthme by one and the same instrument. ld. Waiver. No waiver of any of the terms or condhiorm of this Agreement, and no waiver of airy default or failure ofwmpliancq shall be effective undws in writing, and no waive fuatished in writing shall be deemed to be a wniver of any other tam or provision or any future condition of this Agreement. 15. Miscellaneous . This Agreement will be governed by the laws of the State of Maine. The invalidity or unenforceability of my provision of this Agreement wit not affect anywhaprovuion. The captions of the Paregmphs of this Agreement are for oomenience only and do not limit my terms or provisions. In the event that my mit or action is brought w enforce this Agreement the prevailing party or parties will be emitted to received from the losing party or parties all costs of the proceedings and reasonable attorneys' fees in an amount fared by the court. This Agreement may be separaWy executed in counterpart originals. IN WITNESS WIIERE, the Bank Permanent Lender and the Borrower have executed this Agreement under seat as ofTIecanber .1998. Bank: CFI'IZENS BANK NEW HAMPSHIRE By: Witness its Vice President Permanent Lender: CITY OF BANGOR, MAINE By: its Borrow": REALTY RESOURCES CHARTERED By: its President W 99-38 IRC MMA Unit No. 1 (the "Until") in THE FREESE HUILDING CONDOMINIUM (the "Comicarmium") showed] on Main Street N the City of Bangor, Penobscot County, Maine, as more particularly described in the Declaration of The Freese Budding Condominium dated December J 1998 and recorded in the Penobscot County Registry of Deeds m Book_ Page as the same may be amended from time to time in accordance with its tams and me Ad (the "Declare ion")„ and on the Plat and Plans prepared by Inc. incorporated into the Declension and recorded in the Penobscot County Registry of Deeds in Plan Book Pages _ and � as the same may be amended from time to time in accordance with the Declaration and the Ad (me "Plat and Plate"), by virtue of the recording of which Declaration, Plat and Plans, REALTY RESOURCES CHARTERED and REALTY RESOURCES CHARTERED, as Dedamits, created the Condominium moment to the Maine Condominium Ad, Title 33 of the Maines Revised Statutes of 1964, as emended, Chapter 31, Sections 1601-101, a see, as amended (the "Ad"); TOGETHER WITH an undivided interest in the Common Elements of the Condominium, the liability for Common E mmaas of me Condominium, and Votes in the Association of Unit Owners ofthe Condominium allocated to the Unit pursuant to the Decimation; TOGETHER WITH the rights to use any Limited Common Elements allocated to the Unit as described, specified and allocated pursuant w the Decimation; TOGETHER WITH an eaumem in common with the owners of other units to use the Common Elements of the Condominium for purposes of ingress, egress and all other uses in accordance with the Declaration and the exclusive right and easement for the use, occupancy and enjoyment of the Unit; TOGETHER WITH an easement in common with all other unit Owners to use all pipes, wires, duds, cables, conduits, public utility Imes and other Common Elements serving the Unh and located in any of the other units; TOGETHER WITH an eesemem, m the extent necessary, for structural and subjacent support ova every aha unit and over the Common Elements; TOGETHER WITH all aha rights, easements, rights-of-way, interests, Allocated Interests, privileges and appurtenances as =to particularly described, located, defined, allocated or referred to in the Decimation, the Plat and Plans, and the ByLaws described in the Decimation, as the said By -Laws may be amended from time to time in accordance with the Declaration and the AU (herein referted to as the "By Laws"), all of which are incorporated herein by reference thereto; SUBJECT TO the matters affecting title described in the Declaration ant the Plat and Plans and the terms, covenants, agreernents, essemans and provisions of the Declaration and Bylaws, which tenon, covenants, agreements, easements and provisions shall constitute covenants running with the land and shell bind the Grantee and any Mann having at any time any interest or estate in the Unit, as though such provisions were recited and stipulated at length bereirg SUBJECT ALSO To an easement in common with the Owners of other units to use all pipes, wires, ducts, cables, conduits, public utility lines and other Common Elements serving the ether units and located in the Unit and to an assonant for structural and lateral support in favor of every other unit 99-38 PXWGIIT B (Plans and Specifications) EXHIBIT B-1 (Budget and Cost Estimates) 99-M EXHIBIT C (Permanent Loan Commitment) 99-38 EXHIBIT D (Pere mlent I,aaY Documents) A Permanent Loan Documents Ageed To'. B. Permanent Loan Documents Requ ned by the Commitment, Int not yet agood to